What are ARM Loans?
With Adjustable Rate Mortgages (ARM), the interest rate can change, so your monthly payment may increase or decrease. Most ARMs have rate caps to regulate the amount the interest rate for a loan can increase or decrease over the lifetime of the loan. The interest rates are usually lower for ARMs than for fixed rate loans during the first few years, so ARMS allow buyers to purchase more expensive homes than they could with a fixed rate loan.
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